I wear a few hats in this industry. I’m a landlord and investor, but I’m also the founder of an online letting platform, so I spend my days talking to landlords at every stage, from first-time buyers to experienced portfolio owners.
Because of that, the 2025 Budget and yesterday’s interest rate decision didn’t come as a surprise, but they did confirm a few things many of us have been feeling for a while.
Yesterday, the Bank of England reduced the base rate to 3.75%. On the surface, that sounds like positive news. Cheaper borrowing is something most landlords will welcome, especially after the last couple of years. But when you look at it alongside the tax changes set out in the Budget, the picture is more complicated.
The Budget and what it means for rental income
The Budget confirmed that tax on rental profits is set to increase from April 2027. For landlords, this is another reminder that net income, not headline rent, is what really matters.
From my point of view, both personally and professionally, this is where many landlords will start to feel the pressure. Mortgage interest relief is already restricted, costs have risen across the board, and now future tax bills are set to increase again.
For some landlords, this will simply mean tighter margins. For others, particularly those with highly leveraged properties, it may prompt some difficult decisions about whether certain properties still work financially. This has been one of the most common subjects discussed with clients and peers of late.
Interest rates have come down, but expectations need to be realistic
Yesterday’s rate cut will help landlords on tracker or variable mortgages, and it may start to feed through to slightly more competitive fixed rates over time. That’s a welcome shift after a long period of rising costs and for those facing refinancing over the next two quarters this will be welcome.
That said, we’re not going back to the days of ultra-low interest rates. From what I’m seeing across the market and from conversations with brokers, lenders remain cautious. Borrowing may get a little cheaper, but it’s unlikely to transform affordability overnight.
There’s also the wider economic context to consider. Interest rates usually fall for a reason, and slower growth can bring its own challenges, particularly when it comes to tenant affordability and rent growth.
What I’m seeing across the landlord community
Running an online letting platform gives me a clear view of how landlords are reacting. Many are becoming more selective. They’re paying closer attention to costs, questioning old assumptions and looking for efficiencies wherever they can.
Some are reviewing rent levels more carefully. Others are seeking advice on ownership structures or considering professional management where time and compliance are becoming harder to juggle.
What’s clear is that passive ownership is becoming increasingly difficult. Landlords who stay engaged, understand their numbers and adapt early are coping far better than those who take a wait-and-see approach.
My approach going forward
For me, the focus is on clarity and preparation. That means stress-testing figures, planning ahead for the 2027 tax changes and being realistic about returns.
It also means using the right tools and support. As regulation increases and margins tighten, landlords need systems that save time, reduce risk and keep them compliant without adding unnecessary cost.
The market is changing, but I don’t believe that’s a bad thing. Well-run properties, fair rents and professional standards benefit everyone in the long run. Landlords who approach this as a business, rather than a side project, will be the ones who continue to succeed.
